International Media Watch of news headlines and current affairs reports about Romania

Thursday, January 12, 2012

Romania December Inflation Rate Falls to Lowest in Two Decades

By Irina Savu

Jan. 11 (Bloomberg) -- Romania’s inflation rate fell to the lowest level in two decades in December, meeting the central bank’s target for the first time in five years, as a bumper harvest eased food prices.

The rate fell to 3.1 percent from a year earlier from 3.4 percent in November, the Bucharest-based National Statistics Institute said today in an e-mail. The median estimate of eight economists surveyed by Bloomberg was for a 3.3 percent rate. Prices rose 0.2 percent on the month.

Romanian policy makers cut the main interest rate by a quarter of a percentage point for the second time in a row this month to 5.75 percent, as record-slow inflation made room for lower borrowing costs to boost economic growth in the export- reliant country.

The inflation rate may fall to less than 2 percent by March and be at about 3 percent by the end of this year, central bank Governor Mugur Isarescu said on Nov. 7.

Food-price growth slowed to 0.95 percent in December from a year earlier, compared with 1.4 percent growth in November, on lower fruit and vegetable prices, the institute said.

Non-food costs rose 4.45 percent from a year earlier last month, mainly driven by higher heating bills, compared with 4.9 percent in November, the institute said. Service-price growth quickened to 4.2 percent from 4 percent in the previous month, on higher railway and water prices, according to the institute.